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Demonetisation Fallout? Investments in India Fall by over 50 Percent

A file image of construction work in progress.

A file image of construction work in progress.

New investments in the Indian economy fell by as much as 50% in the last quarter of 2016, compared to the average figure of the previous nine quarters, data released by Centre for Monitoring Indian Economy (CMIE) suggests.

New Delhi: New investments in the Indian economy fell by as much as 50% in the last quarter of 2016, compared to the average figure of the previous nine quarters, data released by Centre for Monitoring Indian Economy (CMIE) suggests.

New investment proposals of only Rs 1.25 lakh crore were observed in the October-December quarter of 2016.

The average for the previous nine quarters, spanning the length of the Modi government, is Rs 2.36 lakh crore. This represents a fall of around 52 percent. CMIE attributed this to the fallout of demonetisation.

CMIE said that 227 new investment proposals worth Rs 81.8 thousand crore were announced from October 1 to November 8, the day demonetisation was announced. After that, only 177 investment proposals worth Rs 43.7 thousand crore were made up till December 31, 2016.

“Evidently, uncertainties caused by demonetisation have played a role in the fall in the flow of investments. The investments climate has been weak for some time. This is now expected to remain weak for some more time,” CMIE said in a note on its website.

first published:January 03, 2017, 16:56 IST